Energy renovation of the Karlovac General Hospital
About this good practice
Croatia faces challenges of building renovation, especially following two devastating earthquakes in 2020. One helpful tool to deal with this urgency is the ESCO model of energy services.
The ESCO model is a framework for contracting energy services through an energy performance contract. This allows energy renovations to be financed solely by the savings accumulated from reduced energy consumption. General Hospital in Karlovac and the Croatian Ministry signed a contract for energy services, facilitated by the Croatian Real Estate Agency (APN), which managed the procurement process. The total value of the contract was 10.6 million EUR, and it was aimed at improving the energy performance of hospital buildings and achieving measurable energy cost reductions. The contracted energy service provider guarantees annual savings of over 650 thousand EUR, with the project designed to repay the service fee from future savings.
The key participants in this renovation were the Karlovac General Hospital, the Croatian Ministry, the Croatian Real Estate Agency as the executive body, and the energy service provider (including more than 30 Croatian companies with up to 165 workers on-site daily). The renovation was co-financed by the Environmental Protection and Energy Efficiency Fund. More than 15 thousand m² of facade, 8 thousand m² of flat roof, and 5 thousand m² of exterior joinery were renovated.
Resources needed
The Environmental Protection and Energy Efficiency Fund co-financed the renovation with 3.3 million EUR. The Karlovac General Hospital will repay the energy service of 7.4 million euros from proven savings in the monthly amounts of almost 44 thousand EUR over 14 years.
Evidence of success
More than 15 thousand m² of facade, 8 thousand m² of flat roof, and 5 thousand m² of exterior joinery were renovated, additionally, heat pumps and solar collectors were installed so 25 percent of the energy now comes from self-produced renewable sources.
The energy service provider conducts regular inspections of the condition of buildings and submits quarterly reports on the realization of savings. The comprehensive renovation reduced energy consumption by 54 percent.
Potential for learning or transfer
This example from Karlovac, Croatia, highlights successful implementation of the ESCO financing model, overcoming typical complexities and legal hurdles. A critical success factor is the external financing mechanism, where the costs of energy renovations are not paid upfront by users. Instead, they repay the investment over time using the energy savings achieved, eliminating immediate financial burdens and ensuring sustainable, long-term benefits.
Croatia’s effective use of this model, particularly for public buildings, offers a valuable blueprint for other EU member states aiming to enhance energy efficiency without upfront public funding. By studying this case, other EU actors and regions can better understand how to leverage ESCO financing and external funds, making significant strides toward energy efficiency goals in a more financially sustainable way.
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Agencija za pravni promet i posredovanje nekretninama (APN)